Payu Secures Final Authorization from RBI to Operate as an Online Payment System

Payu, one of India’s pioneering digital payment companies and a subsidiary of the Bass countries, has received final authorization from the Reserve Bank of India (RBI) to function as an online payment aggregator. This authorization comes under the Payment and Settlement Systems Act of 2007, marking a significant milestone for the fintech firm.

Regulatory Journey to Approval

This landmark achievement follows over a year since Payu initially received conditional approval from the RBI and comes after various regulatory and operational hurdles faced in the past two years. With the final approval, Payu is poised to restart the onboarding of large-scale merchants, a process halted in 2022 when the RBI mandated a freeze on new registrations. The subsequent year saw Payu’s application for a payment aggregator license returned with a directive for reapplication.

Strategic Restructuring at Payu

In light of these challenges, Payu undertook a comprehensive reorganization by selling its global payment unit to Rapyd for $610 million. As part of this restructured approach, the company consolidated its operations across India and Southeast Asia under one banner, appointing Anirban Mukherjee as CEO to drive the new strategy.

Commitment to Compliance and Growth

In a statement, Payu expressed gratitude to the RBI for their trust and the opportunity to contribute responsibly to India’s digital economy. The company aims to build a resilient, compliant, inclusive, and innovative institution that empowers merchants of all sizes—integral to realizing India’s digital vision set forth by the RBI and the government.

Joining the Ranks of Approved Payment Aggregators

Founded as one of the first players in the online payment landscape, Payu now joins a growing cohort of companies like Billdesk, Ccavenue, Razorpay, and Cashfree that have received approval to operate as payment aggregators. Recently, Zaakpay, managed by Mobikwik, also secured regulatory approval, underscoring RBI’s ongoing commitment to enhancing oversight of India’s digital payments sector.

Preparations for Public Listing

The regulatory green light from the RBI also paves the way for Payu’s anticipated public listing, aimed for the latter half of 2025. As part of its strategic preparations for this Initial Public Offering (IPO), Payu has appointed Pramod Rao as its Chief Risk Officer, overseeing regulatory compliance and governance protocols critical for future growth.

Expansion into Real-Time Payment Solutions

Payu is strategically extending its footprint in the rapidly growing real-time payments market in India. Earlier this year, the company acquired a 43.5% stake in Mindgate Solutions, a provider renowned for its real-time payment technologies, particularly in UPI and digital transaction capabilities. This move positions Payu to capitalize on evolving payment trends and offer enhanced services to its merchant partners.

With this final authorization, Payu is set to enhance its operational capabilities and drive significant growth in the digital payments ecosystem in India, fostering innovation and offering valuable services to its diverse clientele.